An interfolded boxed bag arrangement and method and apparatus for making the same from plastic tube or sheeting stock. Plastic tubular or sheeting stock is unwound off two rolls under tension. The stock proceeds to various stations where it is cut into bag lanes by rotary knife blades. A bag lane is cut between each pair of rotary knife blades with a hot knife to form a sealed bottom for the bags. The bag lanes are then cut to a specified length with a hot knife which seals each side of the bag. Bags produced by each roll of stock material are staggered adjacent to one another and are interfolded with each other by a set of rotary gripper fingers and tucker fingers to form an interfolded stack of bags. The stacks are placed into a dispensing box for individual dispensing.